I lost my dollar bet yesterday thinking that there would be a postponement of the Chinese tariffs–oh well stocks are acting fairly rational with a selloff, but not a crash type event.
Interest rates are off a bit, but preferreds and baby bonds are fairly quiet with only the normal suspects showing much action–some shippers, CBL (of course) and PG&E issues are moving around a bit–but they seem to every day so nothing new here.
Our holdings have been quiet all week. We have a few issues that we would sell at the right price-in fact we have a sell in on one right now.
We have a normal sized position in the UMH-C 6.75% preferred which we would sell at the right price, but it looks like we will probably go ahead and hold through the ex-dividend date next week. Recall this was the issue that the company reopened with an announced 2 million share sale and then they went ahead and sold 3.6 million shares. We had originally hoped for a quicker bounce back in share price from the $24.80 area it fell to (from $25.60), but today is at $25.01. We had bought our position at $24.91 so it has not moved up enough to sell (a minimum of 1% and hopefully more). It goes ex on Tuesday so we might just as well capture the 42 cent dividend and then see where it goes after ex.
We had an outsized position in the Kemper Corporation 7.375% baby bonds (KMPA) which went ex yesterday. We held this for 6 weeks and captured the nice 46 cent dividend while breaking even on the share price–so almost 2% for the 6 weeks. This issue is callable NOW so one doesn’t want to buy much above the current levels until more interest accrues in case of a call. We are very much interested in repurchase of this issue down in the $25.10 area–although that may well not happen. I think this is one of the best issues out there–7.375% coupon is super in this marketplace even for a non investment grade issue. In our mind we debated whether to sell or simply continue holding–to me it was a coin toss, but a “bird in the hand” argument won out–plus we held an outsized position so we minimally needed to pare down the holdings.